1. (See Appendix 5.2.) How is regression used to identify what cost drivers might be used in activity-based costing?
2. (See Appendix 5.1.) Describe the phenomenon that gives rise to learning curves. To what type of costs do learning curves apply?
3. ‘‘Simplification of all costs into only fixed and variable costs distorts the actual cost behavior pattern of a firm. Yet businesses rely on this method of cost classification.'' Comment.
4. ‘‘The account analysis method uses subjective judgment. So we cannot really consider it a valid method of cost estimation.'' Comment.
5. Suggest ways that one can compensate for the effects of inflation when preparing cost estimates.
Text Book: Managerial Accounting: An Introduction to Concepts, Methods and Uses By Michael Maher, Clyde Stickney, And Roman Weil.